There are some situations in which it makes sense to plan a portion of the supply chain separately, outside of the overall supply chain DRP plan.

Scenario 1: Unique Local Objectives Must be Respected Along with Global Objectives Suppose that subassembly plant SF1 (Figure 5–1, “Sample Supply Chain”), which makes M12 (Figure 5–2, “Sample Bill of Material”), contains very expensive capital equipment. SF1 is the overall supply chain constraint, so every minute that its resources are utilized brings extra profits to the enterprise. Resource utilization is the most important objective for SF1. For the supply chain as a whole, however, due to rapid product life cycles and a fickle market, inventory turns might be the most important objective. In this situation you could run a two-stage
planning process.

• An MRP for organization SF1 with resource utilization as the objective to generate planned orders for M11, M22, B31, and B21 (the portion required at SF1).
• A DRP for organizations DC1, DC2, AF1, SF1, and SF2 with the above MRP as a supply schedule with inventory turns as the objective to generate planned orders for A01, M12, B13, B23, and B21 (the portion required at SF2).

Scenario 2: Local Restrictions Not Captured in Global Planning Inputs Suppose that item B21, a subcomponent of item M11 (Figure 5–2, “Sample Bill of Material”), has volatile pricing. In lieu of implementing the default planned orders in facility SF1 that a global DRP would generate for M11 and its subcomponents (B21), one could plan the supply chain as follows:
1. DRP plan for organizations DC1, DC2, AF1, and SF2 to generate planned orders for A01, M12, B13, M22, and M11.
2. Load the DRP as a demand schedule into a Master Production Schedule (MPS) for organization SF1. Dependent demand for M11 is derived from the planned orders for A01.
3. Run the MPS.
4. Manually adjust the planned orders for M11 in the MPS (for example, to pull ahead the orders for M11 in order to take advantage of a time-sensitive special promotion on B21.)
5. Run an MRP for organization SF1 with the adjusted MPS as input to create planned orders for M11 components and  subcomponents (B21 in this case).

Situation 3: Single Global Data Model Not Available The one-step supply chain planning capability of Oracle ASCP presumes either the installation of ASCP as part of an enterprise-wide implementation of Oracle Applications, or the existence of collection programs to pull cross-supply chain transaction data from various Oracle Applications instances or from legacy systems. Cross-supply chain data must be accessible to build the net change snapshot used by Oracle ASCP to generate planned orders.

This may not be the case. For example, one or more facilities in the supply chain perform planning and/or transaction processing on legacy systems not yet integrated to Oracle ASCP via some sort of collection program. In this situation, the renegade facilities must be scheduled outside the global DRP plan according to the same steps as used in Scenario 2 above.

Pitfalls of Subset Planning
The two principal pitfalls of subset planning (as opposed to global, single-plan supply chain planning) are:

• local optimization as opposed to global optimization
• plan infeasibility due to supply chain interdependencies

The first pitfall is the fact that plans that optimize individual facilities may not be compatible with the optimum global supply chain plan. Take the case of the two distribution centers DC1 and DC2 in Figure 5–1, “Sample Supply Chain.” The way to maximize ontime delivery for DC1 is to allocate all production from AF1 to DC1.

The same logic holds for DC2. The global optimum solution, which would be missed via subset planning, comes from some allocation of AF1 output to both DC1 and DC2. A simple example of supply chain interdependency is Supplier S3 in Figure 5–1, “Sample Supply Chain.” This supplier supplies item B21 to both subassembly facilities SF1and SF2. Individual plans run for SF1 and SF2 could not recognize the shared capacity at supplier S3 and could not evaluate, if the combined SF1 and SF2 demands for B21 are too high, how best to allocate the B21 to SF1 and SF2. In such a situation the SF1 and SF2 individual plans would be infeasible, but would not even generate any exception notices to alert the planners.

Choosing Between Global Supply Chain and Subset Plans
In general, resource and material capacity are most efficiently utilized in a global supply chain planning environment where planning distributes production requirements across multiple organizations. However, the choice of global supply chain versus subset planning should depend on a number of factors including:
■ Physical proximity of the organizations being planned – If planned organizations are geographically dispersed, it is generally more difficult to fulfill demand in one region from a plant or distribution center far away because of transportation costs and longer lead times. Note, however, that the costs associated with fulfilling demand from remote plants can be modeled in planning. Planning can then optimize production allocation across plants to meet the objectives that have been set. For example, if balancing resource loads
is the primary objective of a multi-organization plan, planning will distribute production across plants to meet that objective.
■ Commonality of the items produced – If you have multiple organizations that produce similar products, global supply chain planning is beneficial because planning can consider factors like material and resource availability, material costs, and resource costs to create an optimal supply chain plan.
■ Commonality of the supply base –Similar to producing common items, organizations sharing suppliers are good candidates for global supply chain planning because supply can be optimally distributed across plants depending on each plan’s production requirements. Global supply chain planning will ensure that supplier capacity is most effectively used to meet end customer demand and to minimize inventory.
■ Linkage among plants – If production at one plant must be coordinated with production at other plants, global supply chain planning should be used. For example, if Plant A provides subassemblies to Plant B (Plant A is a feeder plant), both plants should be planned together.
■ Corporate structure – The internal organizational structure of a corporation is also a major determinate of the planning method used. If there are clear organizational boundaries between divisions, global supply chain planning is difficult to implement.